As of the census[5] of 2000, there were 1,432 people, 583 households, and 303 families residing in the CDP. The population density was 439.9 people per square mile (169.6/km²). There were 616 housing units at an average density of 189.2/sq mi (73.0/km²). The racial makeup of the CDP was 62.22% White, 33.80% African American, 0.07% Native American, 2.51% Asian, 0.56% from other races, and 0.84% from two or more races. Hispanic or Latino of any race were 1.82% of the population.

There were 583 households out of which 25.9% had children under the age of 18 living with them, 29.2% were married couples living together, 17.3% had a female householder with no husband present, and 48.0% were non-families. 43.6% of all households were made up of individuals and 24.7% had someone living alone who was 65 years of age or older. The average household size was 2.14 and the average family size was 2.96.

In the CDP, the population was spread out with 21.9% under the age of 18, 9.8% from 18 to 24, 25.4% from 25 to 44, 16.8% from 45 to 64, and 26.0% who were 65 years of age or older. The median age was 40 years. For every 100 females, there were 72.5 males. For every 100 females age 18 and over, there were 64.4 males.

The median income for a household in the CDP was $22,321, and the median income for a family was $44,625. Males had a median income of $38,393 versus $19,700 for females. The per capita income for the CDP was $21,868. About 14.0% of families and 19.5% of the population were below the poverty line, including 25.7% of those under age 18 and 21.5% of those age 65 or over.

Prince Frederick has served as the county seat of Calvert County since 1722, when officials chose a plot of land known as "Williams' Old Field" as the spot for the new county courthouse. (Contemporary references to the piece of land include an upscale dining restaurant named Old Field Inn, and a street in Prince Frederick named "Old Field Lane.") The original courthouse was finally completed in 1732. The town was most likely named for George II's son Frederick, who was Prince of Wales during the time of the town's original conception.

In 1882, Prince Frederick burned a second time, when a massive fire destroyed virtually the entire town and its courthouse. A new courthouse was erected on the same spot, and remains the center of Calvert County's government to this day.

In the 1960s, Albert Irvin Cassell, a prominent mid-twentieth-century African-American architect in Washington, D.C., sought to develop Chesapeake Heights on the Bay, a 520-acre (2.1 km2) summer resort community for African-Americans. The project was to feature houses, a motel, shopping centers, a pier, a marina, beaches, and a clubhouse fronting the Chesapeake Bay. Roads and a few homes were built by 1969, but the project ended with Cassell's death in that same year.[7]

In 1984, Prince Frederick was named one of seven "town centers" by Calvert County's government. The town center designation meant that while Prince Frederick was still not formally incorporated, special zoning regulations would be enacted and boundaries would be established so new growth would be centered around the existing commercial and residential districts. This was done in order to take advantage of existing infrastructure and discourage poorly planned urban sprawl. Prince Frederick's town center status also meant the creation of special architectural review boards who would encourage theme and unity of new buildings built within the town center.[8]

Linden was listed on the National Register of Historic Places in 2000.[9]

On April 28, 2002, an F4 tornado passed just south of Prince Frederick, killing one person. The same tornado had also devastated the downtown business district of La Plata in neighboring Charles County.[10]

In the mid-1990s, a series of new loop roads and side streets were approved in Prince Frederick in order to divert local traffic off Route 2-4 and alleviate thru-traffic congestion. The first of these roads, Prince Frederick Boulevard, has been completed between Maryland Route 231 and Stoakley Road. A second portion of the road, Chesapeake Boulevard, opened in 2010 on the eastern side of Route 2-4 and provides access to the new Calvert Middle School. Additional roads are planned around the southern portions of town.[11]

Prince Frederick has its own volunteer fire department and rescue squad. Prince Frederick is served by one hospital, Calvert Memorial Hospital, which moved into its current facility in 1978.

There is one public high school in Prince Frederick, Calvert High School, with the mascot being the Cavaliers. In 2000, the Cavaliers won the Maryland Division 3A high school football championship. Prince Frederick also has a public middle school and public elementary school.

Prince Frederick is Calvert County's main commercial and retail hub, as it contains at least five major shopping centers, numerous chain and independent restaurants, three hotels, and Calvert County's only movie theater.

While many in the Prince Frederick area commute to jobs all over the Baltimore-Washington Metropolitan Area, there are several small companies based in Prince Frederick itself. On the western side of Prince Frederick, there is a large industrial park which attracted numerous businesses and places of commerce after offering free land sites. One such business is Recorded Books, L.L.C., the largest independent publisher of unabridged audio books in the world.[citation needed]

There are two newspapers circulated in Calvert County - The Calvert Recorder, published every Wednesday and Friday, and The Calvert Gazette, published every Thursday. A third newspaper, The Calvert Independent, went out of business in 2010.

In 2006, the main branch of the Calvert Library moved from its original downtown Prince Frederick location to a new larger facility on Costley Way, named after Russell Costley, a prominent African-American man who was a longtime advocate and trustee of the library.

In June 2010, the Edward T. Hall Aquatics Center opened its doors to the public. The center features an indoor ten-lane, 50-meter pool with a diving well as well as therapy and leisure pools. Hallowing Point Park is a county-owned recreational area west of Prince Frederick which features tennis courts, athletic fields for baseball, softball, and soccer, and hiking and jogging trails.

The Calvert County Fair is held every fall at the Calvert County Fairgrounds just outside Prince Frederick. The fair moved from its original location in downtown Prince Frederick in 1994.

Located on the southeastern side of town, there is a very large, triangular retention pond at the site of the Prince Frederick wastewater treatment plant.[12] Final approval for the plant was obtained in December 2000.[13] The plant's strange UFO-like appearance—approximately 500 feet (150 m) long per side and location in a secluded and heavily wooded area—in satellite imagery on Google Earth has evoked the curiosity of many locals, who have nicknamed the site the "Giant Triangle" and speculated on its purpose.[14]

Best-selling author Tom Clancy operated an insurance business in Prince Frederick prior to his literary career and was an active parishioner of St. John Vianney Catholic Church, and still owned a home near Prince Frederick on Chesapeake Bay until his death in 2013.